news - FMO, EBRD and Triodos Provide EUR31.6 Million Loan to First Solar Power Plant in Mongolia

Media contacts

FMO, EBRD and Triodos Provide EUR31.6 Million Loan to First Solar Power Plant in Mongolia

May 14, 2018

FMO, Triodos Investment Management and The European Bank for Reconstruction and Development (EBRD) have provided a €31.6 million long term loan to finance the construction of the first solar power plant in Mongolia, at Sainshand in the Gobi Desert, 460 km southeast of the capital Ulaanbaatar.

FMO, Triodos and EBRD will each participate for one-third (€10.5 million) of the total loan to Desert Solar Power One, which will realise a 30 megawatt plant connected to the national grid, or enough electricity to supply more than 27.000 Mongolian households. In 2012, FMO and EBRD previously partnered in financing the 50 MW Salkhit Wind Farm, which was Mongolia’s first ever renewable energy project in a country where 80% of the consumed electricity is still generated by highly-polluting coal-fired power plants.

Frederik van Pallandt, Director Energy at FMO, said: “Renewable energy currently plays a very small part in Mongolia’s overall energy supply, which is mostly based on highly-polluting old and inefficient coal-fired coal plants from the 1950s and 1960s. So this project really blazes a trail for the country’s transition toward a more sustainable power generation infrastructure and also helps meet rapidly growing demand for energy in its developing economy.”

The shareholders in Desert Solar Power One are privately-owned investors United Green Group and the Tucher Group. The Desert Solar Power One plant will generate electricity during the day, when existing supply is insufficient to meet demand. Increasing local power generation capacity in Mongolia is vital for stimulating economic growth in remote areas, since transporting electricity over long distances requires heavy investment costs and results in high power losses. Local on-grid projects make electrification of more rural areas possible in a cost-efficient way.